After nine years of operation, Tesla recently closed its flagship store in the upscale downtown Beijing mall. The automaker apparently decided to take this measure as it reviews its local sales strategy, according to InsideEVs.
Automotive News reports that Tesla’s Chinese subsidiary formally announced the store’s shutdown last month. It further states that the company was shifting its attention toward putting its outlets in suburban locations.
A smaller site in Parkview Green took the place of the former two-floor showroom. Notably, it serves as the primary landmark in Beijing’s residential neighborhood of Chaowai.
As of now, Tesla has around 200 showrooms throughout China. An earlier report from mid-September stated that those in posh locales would be reevaluated and maybe shut down. Tesla aims for most of its showrooms to be located in urban areas. Nonetheless, it is still looking at specific locations downtown.
It is frequently unprofitable to operate both a showroom and a service center in a downtown location due to the extremely high land costs in major Chinese city centers. Therefore, the relocation is also motivated by the need for more of these locations to provide maintenance services. Almost half of all Tesla facilities provide customer assistance in China.
Remarkably, Tesla will be able to build on this by relocating to the suburbs, where land is less expensive.
In retrospect, Tesla reduced the prices of its vehicles in China by up to 9% due to the company’s reduced operating expenses. The Shanghai Gigafactory was also renovated at the beginning of Q3 2022. Furthermore, the delivery time was cut from 22 weeks to one and four for the said quarter.
Tesla China has steadily demonstrated excellent performance in the automotive industry. As if those are not enough, the automaker continues to look for better strategies to expand in the largest auto market in the world.
